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[muddypaws]

Harley-Davidson Just Reported Its Worst Quarterly Sales in Recent History
Jan. 28, 2020 at 9:32 a.m. ET
By
Bill Alpert

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Referenced Symbols

    HOG
    -2.74%

Harley-Davidson reported the lowest quarterly sales since shares of the motorcycle leader started their long slide in 2014. December-quarter revenue from its motorcycle unit was 6% worse than Wall Street’s already pessimistic forecasts, while earnings fell short of expectations by 15%.

The stock (ticker: HOG) opened down 7% at $32.50.

[scotman623]

I’m hoping they start getting their chit together and figure out a way to change some of this... I have some ideas, But I’m not on their payroll so it doesn’t matter..... They need to start listening more to their customers wants....

[iski]

Harley stock price was 36.61 a year ago today.  Today's stock price is 34.86.  S&P is up 24%, same time frame.  Harley stock - a reflection of how the company is doing - is sucking hind tit. 

[JCZ]

I’m hoping they start getting their chit together and figure out a way to change some of this... I have some ideas, But I’m not on their payroll so it doesn’t matter..... They need to start listening more to their customers wants....

Their customers have been saying that for the past thirty years.  They focused on short term stockholder gains instead of long term customer satisfaction.

[RivRaptor]

And this is surprising to who?  Probably HD.  Has to be a conspiracy though, they (HD) are (planning/achieving) to drive the stock into the ground and do a stock buyback, because I can't imagine that this is an accident.  I'd like to believe that we are smarter as a species and capable of running a 100 year old company better than this......alas many old companies have been folding lately. 

[mark]

You’ve got to adapt to your environment or go the way of the dinosaur.  Unfortunately, you can’t go back in time and correct the problem.  Should have promoted the Revolution engine and offered it as an option in a variety of models.  Buell would have been a great platform for adventure and sport bikes. 

[scottt]

https://www.cnn.com/2020/01/28/investing/harley-davidson-earnings/index.html

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[scottt]

Their customers have been saying that for the past thirty years.  They focused on short term stockholder gains instead of long term customer satisfaction.

JCZ; you are right on target. The reason Harley is struggling is at min. Two fold. One, the customer base that grew Harley's business grew old ( I'm one. Bought 12 new over 28 years ). These customers have not only grown older, many have experienced less than desirable quality and product shortfalls. Two, competitors have not rested. There are many great bikes available. Motorcycles that perform, handle, ride and deliver better features at competitive prices to say the least. Granted, they are not Harleys but you cannot depend on brand loyalty forever nor can that be your primary reason to buy.

If I were buying another bike today I'd buy a used Harley. You can buy a low mile touring bike for under ten grand. My days of buying $30,000 bikes that need thousands more in upgrades are over.

All of these issues are driven by Harleys focusing more on there stock prices than product and customers.

Harley's ace in the hole is there huge dealer network, name recognition and customer base. All they need to do is build class leading motorcycles that customers want to buy. Might need to accept a lower margin. Investors would benifit in the long run.


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[PBSTN]

If they would stand behind their product. That's all it would take. This "negative" warranty crap. Keeps me from a new bike.

[scottt]

If they would stand behind their product. That's all it would take. This "negative" warranty crap. Keeps me from a new bike.

What do you mean?

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[J.D.]

The quality issues and moreso the denial of the quality issues has deterred me and quite a few others it seems from dropping premium dollar on an unreliable bike.  Competition is doing many things better than the moco right now.  Harley's desire to market the brand to everyone instead of staying true to their roots to build the best American made motorcycles has backfired.  Once they went public it was just a matter of time.  There's really no easy path forward at this point.

[FLSTFI Dave]

many have experienced less than desirable quality and product shortfalls. Two, competitors have not rested. There are many great bikes available. Motorcycles that perform, handle, ride and deliver better features at competitive prices to say the least. Granted, they are not Harleys but you cannot depend on brand loyalty forever nor can that be your primary reason to buy.

If I were buying another bike today I'd buy a used Harley. You can buy a low mile touring bike for under ten grand. My days of buying $30,000 bikes that need thousands more in upgrades are over.

All of these issues are driven by Harleys focusing more on there stock prices than product and customers.

Harley's ace in the hole is there huge dealer network, name recognition and customer base. All they need to do is build class leading motorcycles that customers want to buy. Might need to accept a lower margin. Investors would benifit in the long run.

Pretty much agree with what your saying.  I'm at 7 CVO since 2009, and have a good 10 to 15 years riding left in me, not retired yet.  Growing up Harley and Corvette were the American dream.  Now, there are other bikes that offer more power, better Handling and more features for less money.  Harley lost sight of what they were.  Corvette on the other hand continuers to be the best buy in the high performance sports car segment, you cant buy more for less from their competitors. 

The biggest thing pushing me away from a new CVO is Price climbing very fast, while features and items are being removed.  Blacked out is less expensive to make, mono chromatic paint is cheaper to do, removing vents closings, and shift pegs and so on.  Then top that with the poor quality.  6 of my 7 CVO's have required a new speedometer due to the runs on the inside of the glass.  Current CVO, a 2019 with 19300 miles on it is on its 3rd set of front brake rotors.  3 of my CVO's have required new compensates, one has required a new engine for lifter failure.  Left side hand module for head unit has failed on my last three CVO's. 

My 14 Corvette had zero warranty work done on it.  My 18 Grand Sport has had zero warranty work done on it.  My 17 F-150 has had the frozen lock issue only.

Dealer network is what keeps me on a Harley.  I do tour on mine.  I rode 25,941 miles in 2019

[Eqcons]

The biggest thing pushing me away from a new CVO is Price climbing very fast, while features and items are being removed.  Blacked out is less expensive to make, mono chromatic paint is cheaper to do, removing vents closings, and shift pegs and so on.  Then top that with the poor quality.  6 of my 7 CVO's have required a new speedometer due to the runs on the inside of the glass.  Current CVO, a 2019 with 19300 miles on it is on its 3rd set of front brake rotors.  3 of my CVO's have required new compensates, one has required a new engine for lifter failure.  Left side hand module for head unit has failed on my last three CVO's. 

My 14 Corvette had zero warranty work done on it.  My 18 Grand Sport has had zero warranty work done on it.  My 17 F-150 has had the frozen lock issue only.

You pretty much nailed it there, Dave.   I won't buy another due to the ever increasing price - it was a stupid price for a bike ten years ago, and it's even more stupid now.  Removing all the features from CVOs (and there are more than you list!) while upping the price is not how I'd do business.  And in terms of reliability - I've had all the replaced speedometers, and the new 110 engine, etc., etc., too.  The biggest one for me is the scandalous failure rate on the original wethead water pumps; a conscientious manufacturer would have had a recall, or a "product enhancement campaign" at no cost to the owners, but HD took their usual "We're not aware of any problem" attitude and had dealers charge the afflicted customer a large number of $$$ to replace something that was plainly NEVER fit for purpose.   Almost $50,000 for a vehicle that can never be called reliable, and is manifestly unsuited to the same mileages as a car of the same price, is just silly - plus see the other thread regarding the continuing erosion of the benefits of being a HOG member...   Current HD management - and their recent predecessors - are utterly clueless about how to run the company.  A product like theirs has to retain the loyalty of customers, and they seem to be making less and less effort to do that.   Their constant seach for cheaper Chinese suppliers to shave a few bucks off their cost, while upping the price of the bike, causes increasing quality and reliability problems, further alienating existing customers.    Sad to say, I think HD's days are numbered, at least in its current form.

[ultrarider123]

I just read the CNN business blurb.  Interesting

"Harley-Davidson has a big problem. Americans aren't riding its trademark hogs nearly as much as they used to do.

Shares of Harley-Davidson (HOG) fell 3% in early trading Tuesday after the company reported sales and earnings that missed Wall Street's forecasts. The stock is now down more than 10% this year.
Most alarming: Demand for Harley's bikes continued to fall in the United States -- even as they rebounded overseas.
Harley's retail sales in America were down 3% in the fourth quarter. That's the 12th consecutive decline. US sales fell more than 5% for the full year."


Funny that they don't say why sales are down.  We have a very good first-hand idea however.


A side note:  Has anyone noticed that the MoCo has revamped their website and the CVO models are no longer "stand alone" models?  They are bunched in with the touring line.

I believe Mr. Levatich is a bit out of touch with reality with his statement in the CNN report:


"But Harley clearly has bigger problems than global trade policy. The company is trying to revitalize its sales with the launch of its LiveWire electric motorcycle.

Harley CEO and president Matt Levatich struck a hopeful tone in the company's earnings release.
"We see 2020 as the pivotal year in the transformation of Harley-Davidson. This year we will broaden the reach of our brand and build more committed riders as we enter new and growing segments in motorcycling and eBicycles," Levatich said. "More and easier access to two-wheeled freedom on a Harley is well underway."


I thought that last line was a hoot...yes, there may be access but the line to purchase is dwindling and costs to "play" going up.

And as far as "build more committed riders", how much more committed will the "new" commitments be than current Harley ownership?  The current folks have put up with inferior product for years.  Does he think these newbies will put up with the same issues for as long as we have? 

WOW...

[Twolanerider]

Obviously there are less Harley buying riders.  The question becomes which is the cart and the horse?  Did lack of riders come first hurting Harley or did Harley's poor efforts lead to a lack of riders?

Obviously again the answer is some of both.  Having said that within the lifetime of this little website Harley's fortunes have changed from a time when people sold used bikes for close to as much as new bikes brought, there were wait lists for new bikes and new CVO bikes were waiting for for months or quarters.  Then problems began....

Lots of problems.  Recurrent problems.  Avoidance behaviors.  Arrogant behaviors.  And now there are bikes in dealerships for their 2nd and occasionally 3rd year since new, paint schemes are often underwhelming and less challenging from a manufacturing standpoint, price points have outpace the CPI significantly, and the company behaves as if it often can't understand why buyers (ex-buyers) respond as they have.  The chicken or egg in the Harley scenario may be mixed but it's easy enough to see which end of the egg came out of the chicken first.